EMIS' revenue rises as it remains confident about NHS investment despite Brexit uncertainity

EMIS’s revenues rose as it maintained that despite political and economic uncertainty, in light of the Brexit vote, it is encouraged by NHS investment.

The AIM-listed healthcare software provider said it was performing broadly in line with expectations for the first half of the year as market share and momentum in order books were maintained despite the uncertainty created by the EU referendum and slower than expected contract awards from the NHS.

For the six months ended 30 June, revenue increased slightly by 1% to £78.7m, compared to the same period last year.

While the rate of growth was lower than in recent periods, the company said this was partly due to the limited contributions from acquisitions during the period, amounting to £700,000, and from revenue headwinds in NHS spending on hardware, hosting contract asset revenues, the Australian business and project delivery in secondary care.

Recurring revenue grew by 6% to £64m, accounting for 81% of total sales.

Adjusted operating profit increased 5% to £17.7m, which included a £300,000 contribution from the July 2015 Pinbellcom acquisition.

EMIS said primary and community care business demonstrated strong growth, due to the transfer of £700,000 of revenues from the ePEX mental health product.

The company also said that performance in the community pharmacy division was “solid” in anticipation of the rollout of its new ProScript Connect product into the Lloyds Pharmacy in the coming months.

The secondary and specialist care division delivered profits below expectations due to additional costs in EMIS Care linked to the implementation of new contracts in areas previously run by the NHS. However, EMIS said that operational efficiencies are expected to improve profit.

Adjusted basic earnings per share increased by 8% to 22.2p, compared to 2015. The interim dividend also increased 10% to 11.7p per share.

Net cash from operations after capitalised development costs, but before the £1.8m cash cost of the exceptional charges, was unchanged at £27.5m. The balance sheet has been strengthened after the company sold its minority investment in Pharmacy2U for £1.5m in July.

Chief executive Chris Spencer, said: "The board's outlook for the full year remains unchanged, with strong revenue visibility, growing market shares ... We are confident that the cost reduction measures we have taken will benefit our financial performance as the year progresses.

"Despite ongoing, post-referendum, political and economic uncertainty, the NHS continues to affirm EMIS Group's strategy of providing change-delivering digital technology helping to create faster, better, cheaper care.

“Matthew Swindells, NHS England's new national director for commissioning operations and information announced, in his first major speech on 5 July, that funding would be available for 'change projects' that require new technology and information to improve the quality and efficiency of care as part of an 'ecosystem for innovation' controlled by the patient."

Shares in EMIS were down 0.39% to 1,015p at 1136 BST.